We are living in a market where things shift faster than most people can track. Pricing that used to change every 12 months is now getting reevaluated every 90 days. Entire categories get disrupted not over decades but in quarters.

In this environment, you can have the best technology, the sharpest strategy, and the strongest backers, but if you cannot tell your story in a way that cuts through the noise, you will get left behind.

Narrative has always mattered in business. What is new is the velocity. Stories no longer just explain a company. They move markets. They attract talent. They drive customer adoption. They shape fundraising outcomes. In this environment, narrative liquidity is as real a currency as capital.

What is narrative liquidity?

When I talk about narrative liquidity, I mean the ability of a firm, a founder, or even a fund manager to put their story into the market and have it circulate with impact.

Just as financial liquidity measures how easily you can turn an asset into cash, narrative liquidity is about how easily you can turn a story into momentum.

This is not hype. Hype burns fast. Narrative liquidity is different. It is about having a story that is authentic enough, clear enough, and resonant enough that it gets repeated, shared, and reinforced in rooms where you are not present.

A dollar that sits idle in the bank does not compound. Neither does a story that only lives in your head. Narrative liquidity is what happens when your story is circulating, when it is earning interest in the conversations of customers, investors, employees, strategic partners, and competitors.

Why it matters now

Markets have always been noisy, but right now the noise is deafening. Everyone has a microphone. Everyone is posting, recording, publishing, and broadcasting. The volume is up, but the shelf life of attention is down.

That is why narrative has become an asset class of its own. The people who understand that are building a durable advantage.

Take a look at The Founder Box, launched by Katie Tarbox. The whole premise is pairing founders directly with journalists to sharpen and distribute their stories. That used to be the job of a PR agency after you raised capital. Now it is part of the startup tool stack, because founders know the right story at the right time can change their trajectory more than another feature release.

Or look at the post from Matt Shoss of Dragonfruit Ventures. He is 22 years old, running a fund with an average GP age of 24. In his words, “momentum is king.” He calls out that founders today are building in public, going viral on TikTok, and raising capital from their audiences. Meanwhile, most of the venture is still relying on pitch decks and handshakes, as if it were 2005.

Here is the kicker: one of the comments on his post came from a fund-of-funds manager offering to make an allocation. Why? Because the edge of narrative liquidity resonated. LPs are rewarding narrative-first strategies, not just founders.

Authenticity as the differentiator

Everyone can tell a story. Everyone is telling stories. The only ones that travel, the only ones that build liquidity, are the ones that are authentic.

Authenticity is not about being casual. It is about being aligned. Your narrative must align with your purpose, product, and operational approach. When those things are aligned, the story compounds. When they are not, it collapses.

I wrestle with this myself. It is tempting to look at Sequoia’s blog or a16z content library and say, “I need to sound like that.” But if I try to be a weak copy of Sequoia, no one will buy it. Founders will not. LPs will not. They will just go to Sequoia or a16z.

What makes Stresswood resonate is different. It is rooted in resilient operators who carry the weight inside companies. It is rooted in the networks I have spent years building across worlds that rarely overlap. It is rooted in my own story, the son of a pastor and a teacher, raised in the South, educated at some of the best universities, still driven to connect dots others do not see. That is my narrative. That is what makes it liquid.

Story as strategy

At Stresswood, one of our pillars is “Storytelling as Strategy.” I believe the best investors in this next era will not just be capital allocators. They will be narrative allocators. They will know how to identify a story before it becomes obvious. They will know how to amplify it at the right time through intentional connections. They will know how to help founders and portfolio companies translate their authenticity into narrative liquidity.

The same is true for fund managers. In a fundraising market where LPs are taking longer to make decisions and have more choices than ever, you cannot rely on a deck. You have to build a narrative that moves through the LP ecosystem. You have to cultivate it like an asset.

And the same is true for founders. You can hire engineers and cut burn, but if you cannot inspire talent, customers, and investors with your story, you will not make it through the turbulence.

This is why you are seeing so many edited video announcements around fundraising announcements. Founders and firms want to own the narrative.

The challenge and the opportunity

The challenge is that this is not easy. Narrative liquidity cannot be faked. People can smell a copycat from across the room.

The opportunity is that when you get it right, it compounds. A strong narrative earns you the benefit of the doubt. It gives you a seat at tables you might not otherwise reach. It keeps your company or your fund in the conversation even when markets are brutal.

That is why I tell founders, LPs, and GPs the same thing: stop treating story as an afterthought. Treat it like a line item. Build it into your strategy. Rehearse it. Test it. Refine it. And above all, make sure it is aligned with who you really are.

Because in a market moving this fast, capital alone will not save you. Technology alone will not save you. Strategy alone will not save you.

The firms, founders, and allocators who win will be the ones who master narrative liquidity.

We have automated the mundane. We have optimized the process. But the scarce currency now is an authentic story.

So here is the real question: Is your story liquid enough to compound, or is it sitting idle in your head?

Earnest

Not long ago, I was sitting with some friends in New York, talking shop. The conversation turned to how I manage to produce so much content—emails, essays, podcast prep—that still sounds like me.

“You just use GenAI for that?” one of them asked.
“Sure do,” I said.
Then came the real question: “But how do you talk to it? How do you prompt?”

That question stuck with me. Because I’d heard it before—just in a different setting. It reminded me of what happens when someone new walks into a church, a mosque, a synagogue. They often ask: How do I pray? What do I say? Am I doing it right?

We may live in an increasingly secular society, but the underlying human needs haven’t gone anywhere. People still seek wisdom, identity, purpose, and community (see the book Strange Rites for a great exploration of this — highly recommend). When traditional avenues fray, we look elsewhere.

Prompting, I’ve come to realize, is becoming a ritual for many—whether they recognize it or not.

I see it in how my friends use GenAI today. One friend built a kind of “confessional GPT” to talk through life decisions with a nonjudgmental counterpart. Another downloaded therapy frameworks to help supplement their journaling practice. I’ve got a prompt I jokingly call my “Deacon GPT”—a trusted voice that surfaces scriptures and reflections when I’m wrestling with doubt or anxiety.

And beyond the spiritual: I use GenAI constantly to sharpen my thinking—but always as one of many thought partners. Like Darwin, who corresponded widely to refine his ideas (I first came across this concept in the excellent book Range — worth reading), I seek out insights from across my network: operators, investors, academics, pastors, founders. There are truths and perspectives that only humans can surface—nuances of experience, unspoken patterns, questions that the data can’t quite capture.

Once I’ve gathered those human insights, that’s when I turn to AI to help me synthesize, iterate, and challenge my own thinking: What do I believe? What don’t I believe? What makes me re-examine an assumption I’ve carried? AI helps me work through those questions faster—but it’s the human conversations that spark them in the first place.

Of course, there are risks. In an era where real friendships are thinning—especially for men (see this article), and where too many people mistake surface interactions for connection—it’s tempting to let AI fill the void entirely. But no machine can replace the beauty (and messiness) of true community. A deep friendship isn’t built on good vibes alone; it’s forged through trust, conflict, and repair.

My hope is this: AI should make us more human, not less. Let it strip friction from the repetitive so we can double down on what only we can do—create, collaborate, wrestle with hard questions together.

Tools change. The human longing for wisdom, connection, identity, and purpose does not.

Prompting may not be praying. But if we’re not mindful, it just might become a stand-in. Better to let it be a supplement—so we can keep the main thing, the main thing.

And one last question I’ve been wondering: are any of my consumer friends seeing signals here? I know every consumer VC and founder I talk to is thinking hard about where the next wave of consumer behavior will go. Is there something in this space? Asking for a clueless B2B investor.

-with gratitude,
eiv

ICYMI posts from this week…

There’s a little speech I used to give—mostly to friends, family, founders, and anyone who would listen—especially if they were debating whether to move to San Francisco or stay put.

I called it the Lottery Ticket Speech.

The core idea is simple:
In any industry, life offers a handful of “lottery tickets.” Rare, high-upside opportunities that can change your trajectory—if you’re in the right place, at the right time, with the right relationships.

You’re going to get some lottery tickets no matter where you live.
But the closer you are to the center of gravity for your industry, the more shots you get.

In tech and venture, San Francisco is still that sun.

I gave this speech once to a founder couple in 2018, just after they’d sold their company and were figuring out their next move. Within nine months, they were living in the Bay. I’ve given versions of it many times since, because the truth of it hasn’t changed. If anything, it’s gotten stronger.

Now, a lot of people believe the pandemic changed this. Remote work, Zoom, asynchronous everything—geography doesn’t matter anymore, right?

I never fully bought it. Early-career? Maybe.
But mid-career and up—when the biggest, rarest tickets start to matter—proximity matters. Density matters. Serendipity matters.

Here’s what those lottery tickets can look like in our world:

• Investing in a breakout startup or fund

• Landing carry or LP slots

• Joining a startup at just the right growth moment

• Taking advisory shares or board seats

• Teaming up with co-founders

• Being present when new movements take shape

One small example: during New York Tech Week this year, a foundation I advise tried to pull together a dinner of top venture folks. Most of the key people were all in San Francisco during NY Tech Week. Gravity wins.

Now, I’ll be the first to say SF isn’t perfect.
I’ve always said it’s the IPA of cities—acquired taste.
Or maybe it’s more like if college were a city: all the energy and optimism, and all the same town/gown divides and dysfunctions that come with it.

But flaws and all, it remains the best gravitational field for technology and venture capital. You can choose to orbit it remotely with strong relationships, but even then, you’ll be on planes a lot.

And you should be honest with yourself about ambition. Some people want one or two lottery tickets, and that’s enough. Others want a stack. But don’t tell yourself gravity doesn’t exist. It does.

Curious where others see gravity wells in their industries today. Pushback welcome.

Everyone I meet lately feels like they’re a little clueless about what’s going on in AI—because things are moving too fast for anyone to keep up.

Companies that scaled during Web 1.0, 2.0, and 3.0 are now trying to rethink how they engage with startups—because many of today’s AI-first companies are generating and scaling revenue at a pace that breaks old playbooks.

One pattern I’m seeing: even the most advanced tech companies are questioning whether their For Startups flywheels are built to meet this moment. (Think: [Company] For Startups, Startup/Venture Coverage Teams, Corp Dev, Product Teams, etc.)

In the past few weeks, I’ve heard versions of this challenge from leaders at a large GPU provider and at a leading cloud monitoring and observability platform:

"We know we need to be close to the best founders—but our current org structure isn’t built for this pace. We need someone who’s out in the field, not behind a laptop."

One leader called this need Strategic Pursuits. They weren’t looking for a deck builder or a product marketer. They were looking for a human who could do what AI can’t do:

• Stay in the flow of hidden insights

• Know the best operators and VCs (especially earliest-stage)

• Build relationships with founders well before breakout

• Help inform multiple internal teams—from Corp Dev to Product to GTM

It reminded me of the window around 2013–2014 when I moved to the Bay Area. BizOps roles were becoming the new internal connective tissue—former consultants joining companies like LinkedIn or NerdWallet to plug gaps, translate strategy to action, and flex across teams.

But Strategic Pursuits is something new. More externally oriented.
More network-driven.
More about information advantage than analysis.

The ideal profiles?

• Former founders who know how to operate with resource constraints

• High EQ, high IQ VCs and operators who live in the network flow

• People who can both gather intelligence and translate it to internal teams in ways they can act on

And why now?
Because we are in an era where old patterns are shattered:

• Your ICP isn’t static anymore

• Your competition isn’t static anymore

• Threats and opportunities emerge faster than your org chart can adapt

Companies that understand this—and that empower adaptable, externally fluent humans—will be the ones best positioned to attach themselves to the next breakout wave.

This isn’t just about startups or venture firms. I’m seeing this same hunger across hyperscalers, public tech companies, corporate innovation groups.

I expect Strategic Pursuits to become a defined role inside these organizations in the next 12–18 months. The need is already here.

Curious what others are seeing: are you noticing this pattern? Who do you think is best suited to succeed in these roles?

— eiv

Since 1933, when President Franklin Delano Roosevelt took office, the term “First 100 Days” has been used to grade the accomplishments and successes of an administration. Many historians feel these initial days in office set the tone of a President’s term and predict its future success or failure.

Similarly, I’ve found that the concept of a first 100 day…

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Yesterday, I turned 40. It’s a milestone that has me feeling energized and reflective. Like a late-20s NBA athlete, I’ve hit that perfect mix of youth and experience. The next decade feels full of possibility — and I’m setting my sights on building something bold: a once-in-a-generation venture capital firm, alongside other transformative ideas.

But befo…

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There was a lot of news that happened last week (and this week) that wasn’t great news. But here are a few things I did like.

Phil Olaleye on LinkedIn: We won! Thank you for all your support - your prayers, your resources |…
We won! Thank you for all your support - your prayers, your resources, your belief. I'm honore…

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So Week 44 had a lot of noise online, but I found some supporting anecdotes for my thesis on Chaintech (tech that 10x productivity for supply & value chain workflows), inspiring words & reality checks on the tech market.

All comps (both physical & digital asset holders) need tech to improve their procurement, production & distribution processes.

devarispbrown shared a problem facing many engineering teams.

While we are all aware of how slight changes in a global supply chain can have massive impacts (cc: Jackie DiMonte)

And the new definition of ClimateTech includes what Chaintech is striving to solve as a tech layer.

In market observations, our current tech private market is a mixed bag. There are clearly still so misalignments around valuation, which is displayed by Anoushka Vaswani’s tweet.

But I also still am reminded by early-stage companies, like my port co @Book_Outdoors that a brighter future is ahead of us.

Lastly, what I really liked from last week was a combination of simple insights to keep me motivated.

more motivation to keep going…

and lastly, how inspiring my friends are, like Daley Ervin, on his crazy physical challenges.

And just getting to see this group IRL!

Let me know what inspired you or what challenged you this week in content.

Event: The South Coast Air Quality Management District (SCAQMD) recently approved Rules 2305 and 316, which attempt to reduce NOx and diesel emissions 💨 by regulating warehouses as “indirect” sources of emissions (Source: JD Supra). The Indirect Source Rule 2305 (ISR), a first-of-its-kind air district mandate, will impose new costs on warehouses and the Southern California supply chain, potentially testing legal boundaries of local authority to regulate “indirect sources” of emissions.

• How it will work: SCAQMD’s points-based program will collect a “mitigation fee” from warehouse owners and operators of sites larger than 100,000 square feet. Operators are exempt if they earn sufficient points from increased visits from zero- and near-zero-emissions (ZE and NZE) trucks. The historical truck volume will determine compliance with ISR requirements. As such, warehouse operators will need to track Truck Trips 🚚 by Class, Fuel Type, Dwell time for all trucks entering and exiting each warehouse gate.

• The consequences: The companion Rule 316 requires warehouse owners and operators that fail to meet the minimum points criteria to pay “mitigation fees” that purport to reimburse SCAQMD for administrative costs associated with ensuring compliance with ISR. It’s projected that fees could range from 💸 $0.90 to $1.10 per square foot each month the warehouse operator is not compliant with the regulation.

• Who is impacted: The SCAQMD had jurisdiction over 4K warehouses in the greater Los Angeles area and Inland Empire. But other air quality districts are eagerly looking at how this ruling will impact the use of EVs and how it will be inforced. ISR passed in May 2021; however, many other regions could approve similar orders if ISR works.

My thesis: ISR (and future similar rulings) serves as a catalyst and commercial use case for warehouse operators to adopt technology to acquire essential data to improve operations.

• Logistics boom contributing to the climate problem: The increase in e-commerce demand has been a driving factor for the growth in warehouse and fulfillment centers across the US. This trend has increased the number of diesel trucks on the road, contributing to carbon emissions.

• The warehouse has been a black box of data: Despite the emergence of more visibility tools throughout different points in the supply chain, the warehouse has remained opaque. Many of the Transportation Management Solutions (TMS) and freight visibility tools have been adopted because of the federal Electronic Logging Device (ELD) mandate. This 2018 ruling has been a tailwind in growth for companies like Platform Science, KeepTrucking, Samsara, and project44. But freight visibility for shippers usually stops when trucks reach the fulfillment centers.

Recommendation: This ruling makes a commercial case for warehouse owners and operators to adopt site visibility systems. The two primary types of site visibility solutions are load dock/gate visibility and yard management tools. For example, the two platforms could look something like the following:

• Warehouse Dock Door and Gate Visibility tools 👀 (Invest): Warehouse operators could desperately use a full-stack (hardware, AI/ML capabilities, UI with data reporting) vision-based gate visibility solution (Navtrac, Kargo, e.g.). The technology will identify and extract relevant data points from what types of commercial vehicles enter and leave an industrial facility. This data will be used for ISR compliance and help to improve operations.

• Yard management platform (Track): The Dock Door and Gate visibility solutions will feed real-time transportation data into a suite of yard management solutions that improve operational efficiency. These features could include contactless driver check-in, dock door appointment scheduling, integration with 3rd party fintech solutions to managed accessorial or lumper payments, etc.

Trend: Institutional investors have invested over $87B 💰in single-family rentals (SFRs) 🏠 in 2021 (WSJ), which will create 🌊 of opportunities for startups that provide fintech solutions and property management to landlords.

• The last recession started this trend: The strict mortgage underwriting standards that followed the Great Recession led to many suburban homes converting to rentals. As a result, from 2006 to 2018, SFRs in the US grew 30 % to 15M, according to the Urban Institute.

• Maturation of Millennials sets the stage: It’s a hot housing market right now that has Millennials competing with (each other) and institutions for what would be starter homes. However, other millennials are locked out of homeownership by heavy student debt burdens, making it challenging to save for a down payment — but optimal renters. As a result, market dynamics have generated demand for property investment marketplaces, such as Roofstock and Doorvest, that provide fractional ownership.

• SFR has caught the attention of big names: More institutions view the suburban home as a core asset, on par with apartment or office buildings. Blackstone, Invesco, and Goldman have committed more than $11B to the market this year. According to Redfin, during Q2 this year, 1 in 6 home sales went to an investor. In Atlanta 🍑, Phoenix ☀️ and Miami 🏝, it was 1 in 4. 😱

My thesis: Given that the SFR market is more standardized, corporate landlords will use their resources to produce higher efficiency. Therefore, more software and technology are also available to help manage and operate thousands of disparately located houses.

• Historically mom-and-pop landlords have been underserved in insurance products and maintenance services — regulated to fragmented local and regional service providers or complete tasks independently.

• The limited housing stock will also result in more renovations, given current homeowners who in previous generations would have just bought a home now will need to start renovations for more space — leaving tremendous opportunities for embedded fintech products to get capital for those projects and construction tech point solutions for high priority projects like roofing and fencing. “Home remodeling will likely grow at a faster pace given the ongoing strength of home sales, house price appreciation, and new residential construction activity,” says Chris Herbert, MD of the Joint Center for Housing Studies.”

Recommendation: Several sub-sectors in proptech have flourished for the last decade thanks to the institutionalization of SFRs — most notably property investment marketplaces. However, I believe the following two subsectors will outperform the growth of most proptech opportunities over the next decade:

• Embedded Fintech for property owners (IN): There is a strong need for financial software that helps landlords and owners get higher quality insurance policies (e.g., Obie, Steadily, Renofi).

• Property management (TK): It’s easier to buy properties online, but it is still difficult to manage the repair of a leaky faucet. A lot of activity in this sub-sector, but what model will win? (e.g., Humming Homes, Mynd, Belong, Great Jones, Darwin Homes). Also, there are expressive point solutions for the specific repair of large project items like roofing and fencing (e.g., Roofr, Ergeon).

In the spring of 2007 (d**n, that feels so long ago), and I wasn’t too sure what I would do after college. I knew that I didn’t want to pursue a career in law after a very bus…

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This weekend I had a great conversation with a young, wise, and driven founder. It was a follow-up call that didn’t focus so much on the startup’s traction or how he was planning to expand to new markets. We discussed his ideal profile for a Head of Business Development. A few sentences resonated with me because he clearly described the desired characteristics in people who become involved in his venture — no matter if the individuals are employees, advisors, or investors.

The founder shared four specific qualities he seeks out to propel the startup into a transformational multi-billion dollar company. Those values (which he mentioned I exuded 😬) were:

• Respect

• Humility

• Speed

• Ruthlessly Persistent

This concept of having values drive who you (as an investor or entrepreneur) partner with isn't novel. My friend, Elliott Robinson (the ValuesVC on Twitter), regularly posts the value principles he shares with his portfolio companies.

I’m reminded how important it is in the startup ecosystem to have a crystalized view of your value system after my conversation with the founder and re-reading Elliott’s values document. I’ve been challenged to write down my principles, characteristics, and mantras myself to ensure future alignment with portfolio companies. I honestly like the four factors that the founder mentioned and look to build out how I will continuously improve at fulfilling those characteristics in board work and my dilligence process.

I encourage every investor and founder to do the same. No matter if you look to share your values or principles publicly or privately, it is essential that you take time to build your values-based investment strategy. As a VC, this will provide me with a Northstar on what my actions should always look to exemplify. Understanding what values you prioritize as entrepreneurs in an overcapitalized market will help you filter for the best lead investor to join your board.

What values do you believe are essential for you to align with your crucial business stakeholder (i.e., investor or founder)?

I typically don’t have a planned content calendar when I look to publish a post every Wednesday (that may be a good or bad thing). Sometimes I look to elaborate on a thesis that I’ve written. But many times, I try to reflect on a motif that has repeatedly been shared with me the prior week, which makes me think of my parents. Each of them had a different style to the content they developed for their respective professions. My mother, a teacher, always lesson-planned months — maybe quarters — in advance, while my father, the pastor, outlined his sermons late Saturday night on subjects that were speaking to him. I find myself sometimes for these weekly posts evoking my “inner science teacher” (where I examine the ins and outs of an industry), while in other posts, I reflect on a common theme or lesson that has been stirred in my spirit.

This week’s “Streaming Consciousness” is an example of the latter occasion. The concept that has emerged in multiple conversations this week has been the importance of storytelling. You may think that storytelling was so prominent in my week because I heard many pitches from founders. However, the subject came up from several conversations with colleagues and other investors on how critical storytelling is for a venture capitalist’s career. Of course, we pitch to LP investors. Still, in this client services role, VCs need to absorb information from startup pitches and then recite the critical data and insights in a manner that provokes productive debate and leads to conviction around an investment decision.

No matter how informed you are as an investor, I’ve learned that one bad story can kill any potential deal momentum. And I’ve honestly found cultivating that narrative in the “zoom” era to be a big adjustment compared to the pre-pandemic setting in the boardroom. I’ve countered the zoom fatigue by making sure I construct better talking point frameworks to develop deal presentations.

Have you felt that the video conferencing environment has impacted your ability to tell a great story? And if so, what have you done to counter the circumstances? Leave a comment.

Two trends over the last ten years have intrigued me: 1) As software continues to eat the world, the importance of the engineering function has increased significantly, and 2) corporates (from all industries) increased interest in capturing and leveraging data to improve operations. These two separate shifts have produced impactful SaaS/cloud companies, as well as a need for solutions that optimize enterprise companies’ most precious resources — engineers and data.

To preserve the first asset, engineers, companies (CTOs or engineers themselves) have sought the developer and operational tools available. DevOps companies increase efficiency, improve quality, and reduce costs for designers, engineers, developers, and IT professionals. These technologies range from typically engineering team workflows, including code management, product management, logging & monitoring solutions, and delivery & deployment (primer).

Now, the second asset, data, has had a different path to optimization. Over the last twenty years, the importance of data for enterprise companies has been described in many ways. Data is the new oil! Data is king! But I would argue that the initial importance placed on data (without any sound strategy for its use) should have produced other sayings: Data is cumbersome, Data is confusing, and Data is inefficient.

This pain point has led to the emergence of data tools that enabled engineers (specifically data engineers) to do the following: build & secure data pipelines, ensure data exploration & building models for application, and leverage BI/analytics tools to create reports for the decision-makers in business units. There continue to be horizontal and vertical SaaS solutions built to solve portions of the data problem (primer). However, an indirect result of the corporate prioritization of data was creating a new bottleneck for decision making — the engineering team. Executives across many different industries have told their employees that their investment into data and engineering would lead to better and faster decisions. However, this hasn’t been the case for many companies because the data tools expected to help sales & business development, marketing, and other non-technical functions, depended heavily on engineering talent to find, extract, or secure the relevant data.

To address this problem, tech companies have built out engineering teams dedicated to data operations or growth marketing, while legacy industries have outsourced more data engineers. My thought is that another option helps organizations achieve optimizing both goals: 1) to have engineering talent working on the most critical technical tasks and 2) leverage data to help business owners make better and faster decisions.

And several founders have started to build what I call EvOps (I know I’m trying to make fetch happen). I define EvOps as companies designed to increase efficiency, improve quality, increase decision speed and reduce costs for every other function outside of engineering workflows. I’ve started to see exciting companies building solutions that leverage data to serve the need of specific functions: growth marketing (Mutiny), business operations (Savvi), and data analytics (bit.io).

If you know any other EvOps (it might catch on) companies that are leveraging data and or AI to meet the needs of business units such as marketing, sales, business operations, customer success, and data analytics, please reach out to me on Twitter or LinkedIn. If you are a founder or investor and are working in the EvOps arena, I would love to hear from you as well.

It’s Wednesday. So it’s time for me to share what trends or concepts are occupying my brain. Last week I wrote about how insane the VC market has been thanks to more capital in the market, low-interest rates, and phenomenally startups that are increasing the acceleration of technology adoption in many industries. The moral of last week’s post was to stop complaining and adjust to the game (speaking directly to myself).

I later saw that the “State of Venture Capital” presentation from the “All In” Podcast further elaborated that the times are changing. One point from the presentation that resonated with me was this slide:

It reminded me that last year, I shared that I was shifting my investor mindset (from an opportunistic approach to a more focused strategy). However, I never shared those focus areas with the general public (until now, see below). If you invest in these areas or operate a company in one of these themes, please reach out to me on Twitter @earnestsweat.

Last week, I had a great conversation with a friend who had just transitioned from a tech operating role to an early-stage investor role. When I asked him how it feels to be in the venture: he stressed that he felt very fortunate and that it was an intriguing time to enter the venture capital. He is at an established early-stage firm, and I asked if the current funding environment has caused his partnership to shift their strategy or not.

He told me the best quote I heard all week. He said his partners have stressed that you have to “play the game that is on the field and stop complaining about the way the game was played.” It made me think about sports today — in particular basketball. There have been quotes from old-school hoopers that today’s game is too soft, too nerdy (i.e., analytics), and to some extent lacks heart (not much defense). Like Candance Parker taught Shaq, I feel the NBA has changed with more skill, athleticism, and team strategy.

The venture ecosystem has had its shift. It’s changing with an infusion of more capital (more competition) and changes in diligence process routines (i.e., meeting online versus in person). If I’m honest, these changes haven’t been wildly accepted by the industry with shifts in strategy. But I’ve many respond with complaints and frustration (I include myself). My friend’s quote reminded me that I have two options with a changing market: 1) I can sit on the sideline and complain, or 2) I can shift my strategy in a manner that leverages my strengths to win at this new iteration of the VC game. I’m too competitive not to do the latter.

Of course, I’m looking for pure enterprise SaaS and AI tools. Still, the startups that intrigue me (and typically 😴 others) are those companies striving to disrupt markets that historically are driven by personal relationships and intermediates (brokers and distributors) that create nuance and complexities hard to understand by outsiders. These industries have extremely large TAMs, but stalled adoption (or the fear of it) has caused many investors to question if these vertical SaaS, tech-enabled services, or B2B marketplace solutions are venture-backable businesses.

Well, I still believe they are. Especially, after 2020 which has served as an accelerant of adoption for industries like retail, construction, real estate, supply chain, etc. Historically, I have always focused on the founding team and asked myself, does the company have the right mix of insiders and outsiders to disrupt this industry? Meaning is the founder able to articulate the vision to solves its customers’ core needs today and not cause key inhibitors to rise (usually enterprise IT groups and business units that could be deemed redundant thanks to technology). I’ve seen leaders like Nick from AirSpace Technologies embody the perfect balance of understanding the critical time-delivery market and create a vision about the future of airfreight delivery that mobilizes technologists from outside the legacy industry.

But yesterday, I got another critical question to consider when looking at these types of businesses. One of my colleagues challenged me to ask (for industries characterized by personal relationships and brokers) who in the market will get hurt most by the startup’s disruption? If the likely culprit in the industry is a larger broker or supplier that could block that startup's progress, does the founder have a strategy to work with or enhance (through a white label) their operations? That simple string of questions blew my mind. And will help me now when I’m looking for those startups that strive to build B2B marketplaces and vertical SaaS in those dull, unsexy, and very nuanced industries that I ❤️.

Over the past two decades, we’ve lived through two recessions, not including the present crisis. Living through one crisis while still reeling from the prior feels a lot like staring into a rearview mirror while also focusing on the even bumpier road ahead.

In high school (better yet, it was college for the elder Millennials) when the dotcom bubble burst in the early 2000s, we saw a limiting truth emerge — online businesses were far more susceptible to failure than we initially thought. Most companies were chasing the popular trend at the time (e-commerce). Few took the opportunity to look forward and recognize the underlying opportunities ahead in emerging solutions like cloud computing. Amazon and Google did.

Then fast forward to our entrance into the workforce in 2008. We uncovered the nasty truth about mortgage-backed securities, which culminated in a global financial crisis. Those who were focused on the road ahead recognized that the smartphone platform would open up several new mobile solutions to optimize the analog world of housing and income, e.g., gig economy service-providers like Uber and Lyft, and short-term housing/rental solutions like Airbnb.

Venture Capitalists have always tended to focus on the future. History has a way of highlighting those who did and those who didn’t.

Queue Q120, when Americans (and the rest of the world) found themselves in desperate need of essential services we often take for granted — healthcare, mail, food — I began to focus on the limitations in how many of these crucial industries operate. What was clear to me was the gaping inefficiencies of the legacy systems and technologies we rely on to get our day-to-day needs accomplished.

It’s time to take a closer look into the window of the future. Catching a glimpse of what could go wrong has, on the flip side, creating an opportunity for us to think through what could go right. Before the COVID-19 pandemic, we were aware of several global trends that would have an outsized impact on various industries — everything from baby boomers transitioning from the workforce to the emergence of e-commerce as a viable retail channel. Once the pandemic accelerated those trends (by what some suggest a decade worth of time), venture capital indeed began to double down on the apparent opportunities. But we should continue to look out even further.

Right now, people who’ve never leveraged delivery services for day-to-day goods are reliant upon them to eat, receive medication, and more. Those who never envisioned moving to more remote and suburban areas have quickly packed up and settled in new homes far away from the city life’s convenience, making them more reliant on long-distance delivery services and collaboration tools to complete their day to day work. This growth market will not diminish. It is our future.

The house of mirrors and windows that we’re living in can be a VC’s most significant asset right now. We’ve been told for decades that software will eat the world — but perhaps it won’t happen in the way we believe. Venture capital has always invested in transformational technology companies that create pathways to new luxuries (remember life before Airbnb? Me neither). The windows of 2020 have shown us: we have to focus on the transformational technology companies that will create more accessible pathways to our necessities.

Here are three things I’m focusing on now, thanks to what I’ve seen ahead:

1. Investing in companies that are genuinely looking to transform a majority of the global GDP. As our connections become more global, this means looking at how legacy industries such as travel and manufacturing will look by the end of this decade. But given the realities of COVID19, this also means looking at solutions that optimize markets' efficiencies in healthcare, food/agriculture, supply chain & manufacturing verticals.

2. The essential industries desperately need technology solutions for the next 50 years to meet customers' more complex needs. In my book, this means looking at sectors within commerce infrastructure (such as logistics, e-commerce enablement, etc.) & the built environment (commercial & residential real estate, construction, etc.).

3. Founders with legacy industry and technology experience. Having worked with companies ranging from KlearNow to Airspace Technologies, I’m aware that it comes down to working with founding teams who have firsthand experience and background in the actual legacy industry they serve — not just tech. Take Luke Saunders, the founder of Farmer’s Fridge (a company in the GreatPoint Ventures portfolio). We invested in a founder like him because of his direct experience with the consumer need as a traveling salesman who often lacked fresh, farm-to-table options for meals. His company is now solving a critical nutrition problem that would otherwise only exacerbate in an increasingly transient culture.

I would love to hear in the comments the following: What sectors or you bullish on? What early-stage startups within the themes I mentioned (and those I didn’t mention) are you most excited about?